L’oreal in Thailand

L’Oreal in Thailand (A)

- 16th most populous county but was ranked sixtieth in GDP per capita.

- Had been around since 1950’s but by 1990’s:

o Two different L’Oreal entities in Bangkok:

• 1. Siampar

• Oldest, a “joint venture with a local conglomerate”.

• Produced some of their products locally because of high duties on luxury products, and importaed the rest.

• Distributed Lancôme and other luxury brands owned by L’Oreal in department stores.

• 1998- L’Oreal bought out partners share of this venture and discontinued local production of Lancôme in Thailand.

• 2. Thailor

• Created 1992, in charge of importing and distributing salon products, makeup and skincare products.

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o Despite both being owned by L’Oreal, both brands maintained offices in different locations, “had different internal cultures, different processes and different policies, especially regarding pay and benefits, due to the local partner’s desire to minimize expenses”.

- The two companies were merged to create a single entity- L’Oreal Thailand Ltd. As a result of the Thai government abolishing requirements that foreign-invested companies had local Thai ownership.

- Managing Director of L’Oreal Thailand- Chris Martin

o After the merger, the two brands were sstill on different floors and didn’t speak, both were suffering “major losses”, were “under-capitalized and still managed under the Thai exception”.

- The